LHSAA IRS Audit in Final Stage—State Audit to Begin
The Louisiana High School Athletic Association (LHSAA) says that an ongoing Internal Revenue Service audit of the years 2004 through mid-2007 is in the final stage of resolution. During the audit, the IRS determined that the former commissioner did not sufficiently document expenses charged on the organization’s American Express card. The IRS did not allege any fraud or wrongdoing but has reclassified the American Express expenses as personal compensation of the former commissioner. The Association has retained tax attorney Timothy Burgmeier to further address the issues in federal tax court.
As a result of the IRS audit and a request of the state’s Legislative Auditor, the Association’s Executive Committee has also agreed to authorize an audit of the Association’s finances by that agency. LHSAA Commissioner Kenny Henderson says the organization welcomes the opportunity to have the state review its books, but maintains its position that as a private, non-profit organization, the LHSAA is doing this voluntarily and not out of any legal obligation.
“Some people believe we are a quasi-public agency of the state and that’s simply not true; the Association has successfully defended against this argument in the past. However, the Louisiana Audit Advisory Council has questions about the prior administration and the use of association funds. The Legislative Auditor’s office requested to review our books and our Executive Committee agreed,” says Henderson.
He noted that the LHSAA is primarily funded through non-dues revenues such as corporate sponsorships and gate revenues from state tournaments the Association organizes, sponsors, and administers. He says less than 8-percent of the Association’s revenue is derived from voluntary member dues paid by both public and non-public schools, and that the LHSAA does not receive any federal, state or local tax dollars.
“We’ve gone to extraordinary lengths to be open and forthcoming. We are certainly cooperating in every way, and we look forward to continue working with the IRS and state officials to clear up these issues as soon as possible,” he adds.
The LHSAA is a private, voluntary, non-profit organization comprised of most of the state’s public, private and parochial high schools. The Association is member-directed. The rules that govern interscholastic athletics and the Association are promulgated by member school principals. All LHSAA rules are voted on and approved by the entire membership at the January Annual Meeting through the use of the democratic process.